India: How To Beat the Talent Crunch

How Industry Can Help Improve IT Education in India

India is on the move. While, a number of other sectors are growing quickly, the IT sector the main driver of growth for past decade or more, continues to retain the potential to lead India for another couple of decades at the very least. However, there is just one small hitch. Facing a talent crunch, India does not have enough trained manpower.

Indeed, though difficult it may be to believe a country with a billion-plus population people, faces a future of stunted growth due to a manpower shortage, nonetheless it is true. While, the higher education sector i.e. BTech, BE, MCA, MSc, etc., and not the training industry like NIIT, produces almost 3-lakh graduates each year, only 1-lakh are employable by IT-industry. And even the 1-lakh employed by the IT industry, need to be imparted additional training. With no other option, the IT industry does hire beyond this 1-lakh; however the training costs are huge.

As a result of this huge mismatch between demand and supply of good quality engineers, the salary costs have gone through the roof, steadily eroding the country's lower cost advantage. Continuing to grow on the basis of quality work, however, if we still retained lower cost advantage, the growth would continue to be spectacular, as in the past.

An in-depth analysis throws up a question we need to ask of ourselves: "Why is the quality of our graduates so poor?" Quite simple, good-quality graduates are produced due to three factors and they are:
1. Good faculty.
2. Good students.
3. Good infrastructure.

Very few if any of our colleges provide decent infrastructure for IT education, even though one needs very little compared to other engineering streams. While, the quality of students produced by our school system may not be very poor, most certainly, it could be better. This mean, the blame for poor graduate quality is due to a lack of good quality faculty in most IT/CS departments across the country.

Again, we need to ask why we do not have enough good quality faculty in IT / CS departments in our engineering colleges. One could argue that we are not producing enough Ph.Ds, or even MTechs, and hence the pool is small. However, the truth is most colleges end up hiring BTechs, or MCAs, which is not a bad idea, as one batch of graduates could be hired to teach the next batch, till such time they find a suitable job in the IT industry. Again, one could ask whether there are insufficient research students. But, to come back the main point, the reason our faculty is not top grade is because:

End the Licence Raj. Paying faculty peanuts means we only get the monkeys.

One only has to compare the salary levels of industry and academia to notice that even in the IITs, inarguably the best institutions in the country, the salary of a faculty member is some times lower than the salary the IT industry offers its graduates. Highly demoralizing, little wonder then many faculty members leave their teaching posts for greener pastures. In any case, only a few people who really value the academic freedom, or have a keen interest in teaching and research, join the faculty.

Thus, it is obvious that the biggest obstacle to growth of quality education in IT / CSE is the compensation package given to faculty members. The government will not do anything in this regard, as surviving on the crutches provided by communists, it cannot even think of providing a differential (market-linked) compensation package in the education sector. Increasing salaries of all college faculty members would be just too expensive, and would lead to others demanding higher wages, as well.

While, we have been talking about government run colleges, even the wages offered in private colleges, are effectively controlled by the government indirectly. Theoretically, the government may only determine the lower ceiling on salaries, in reality it tightly controls the number of seats the tuition a college can charge from each student, which means the government has ensured the private sector is also unable to pay lucrative salary packages to their faculty.

A prime example of government interference is The Indian School of Business (ISB). For the first time, a prestigious foreign business daily ranked an Indian institution amongst the top 20 in a list of the world’s top 100-business schools. Considered illegal, the ISB has not taken accreditation from All India Council of Technical Education (AICTE) because ISB officials fear interference, saying “they will decide our courses, our student intake, and even the size of our buildings.” But, ISB is being punished for rebelling against the Licence Raj. Admitting 120-students in 1992, it got approval for only 45. In 2001, it applied for 180, but didn’t get approval for six years. In 2004, AICTE rejected its unique dual degree programme with a reputed foreign university, whereby the latter would have flown its faculty to India. Its innovative programme for family-run businesses was also rejected. Last year, it seriously contemplated closing down. Instead, it has started campuses in Dubai and Singapore - far beyond AICTE's reach.

Coming back to the main issue of good faculty, it is interesting to note 2000 engineering colleges in the country are in sore need of about 25,000 IT / CSE faculty members. The number of PhDs in these colleges is not even five percent of it. In any economy sector, a 95% shortage would spell disaster. It would mean a massive crisis, salaries would go through the roof, there would be talk of hiring people from abroad. But, because of the tight control the government has on the education sector, nothing of the sort is happening.

How the Indian IT Industry Can Help Improve Education Quality
In such a scenario, the IT industry can help improve the quality of education by giving software at very low cost, offer more discounts on hardware, other organize training sessions for teachers, provide course material, etc. No doubt, all this will help.

What is really needed at this time is to find ways to improve the compensation packages of faculty members in these areas. The government isn't going to do it in the government colleges, and it won't deregulate education sector to let market forces play a role in salary. So, to some extent, the it is up to the industry to solve this problem.

Perhaps, the industry should plough back some of its profits into colleges to increase faculty compensation packages. Question remains which college out of the 2000-to support? It’s quite simple, support a college in proportion to the benefit a company gets from a college. For example:

• Pay back for every student hired. For every student hired, send a thank you note, and a cheque equivalent to one month salary of your new employee to the college the employee graduated from. Specify a good percentage of the amount should be distributed to faculty of IT / CSE department(s). This will also encourage the colleges to teach their students the importance of stability and not changing jobs frequently, since they get some cash only for graduates who stay in their first job for at least a year.

• Match donations by employees. Match the donation an employee makes to his / her alma mater. Usually there are limits on the matching grant, since no company would want an unlimited liability on this count.

• Set up Chairs and Awards. You may simply want to support good-quality departments or good-quality faculty members only. Setting up chairs involves giving large sums of money upfront (say, Rs. 50 lakhs). You could provide certain guidelines on selection of a faculty member who will benefit from such a chair.

In summary, to beat the talent crunch, it is important for the government to stop running universities and colleges. All institutions should be autonomous. The money the government saves should be ploughed back in the form of scholarships. Competition will take care of the rest. Students will be able to make informed choices. Good institutions will thrive and poor ones will close.

There should be no promotion of learning by rote, incompetent faculty and mediocrity, as is the case at present. Original thinking should be encouraged not punished, so that employable graduates can be created. Institutional courses should be intensified and meritocracy based. Equal emphasis should be placed on practical and theoretical learning. Companies should hire students for the summer to give them exposure to corporate culture. Last but not least, while Hindi is our mother tongue and it is important we are equally proficient in it as we are in English, all students should be taught English, stressing on correct pronunciation and grammar, whether it is a child studying in a government school or one attending a convent school.

Then and then only, will India beat the shortage of talent that has begun to loom over its head. Drastic measures will need to be taken, if we are to hang on to our outsourcing crown.